How to Grow Your Business with a Referral Program

If you’re a franchise marketer, retailer and consumer services advertiser, you’re likely investing significant resources in lead generation. New customers are, after all, the fuel your brand needs for sustained growth.

Typically, residential service firms and franchise networks alike focus a large proportion of their marketing budget on generating fresh leads, but in many cases the most direct way to efficient growth is referrals from your current and past customers.

Referrals Can Be Your Best Leads

The leads you generate through digital advertising and other marketing are essential to your success, but it remains a numbers game: Generate X leads to get Y consultations to deliver Z proposals then try to close. That process creates a reliable sales funnel, but includes several steps—and delays—between your marketing investment and seeing the return on that investment in the form of actual sales.

A generated referral provides a lead that has already placed your brand firmly in their consideration. But a referral from a current or past customer has an emotional value beyond your brand name and contact details. Even a casual referral is accepted as an endorsement. An actual recommendation moves your offering and your brand that much closer to a sale because it removes so much of the uncertainty for individuals making a one-time, first-time or infrequent purchase decision.

The most effective referrals, naturally, are endorsements from friends or colleagues your prospects know and trust. (More on that later.) But for sheer reach and volume, online reviews are a highly effective channel for making a positive first impression for your brand. Search engines, particularly (unsurprisingly) Google, are the first resource most customers use to find the products and services that interest them.

That’s true across all categories—from small impulse buys to more considered purchases like home-improvement projects and major appliances. It remains true even for decision-makers in businesses making supply or capital expense decisions.

Positive online reviews demonstrate to prospects that your brand is the safer choice. Even your responsiveness to the occasional negative comment can provide proof of your company’s genuine interest in responding to customer concerns, and provide valuable insights into the preferences of your audience.

As an added bonus, Google’s search algorithm takes your number of reviews into account, meaning more reviews can have a great effect on your organic search ranking.

How to Generate More Reviews and Endorsements

The simplest answer, of course, is to ask for reviews. Soliciting reviews ensures that your many satisfied customers are seen and heard by people researching your company.

You can ask for reviews in whatever channels you already use to communicate products, specials, offers or any marketing message. Include it in your direct mail. Send follow-up email and text messages thanking your customers for their business and asking for a review. And to make it extra easy for them, make sure you include a link to your business profiles—not just on Google, but on any other site where you maintain a presence, including Facebook, Instagram, Angi, the Better Business Bureau and others.

Will all of the reviews be glowing endorsements? Probably not all of them. But your responses to those less than effusive comments will help reinforce your commitment to customer satisfaction. There’s more on that here.

How to Gain More Direct Referrals

As mentioned earlier, the gold standard for acquiring new customers is a direct referral from someone your prospect knows and trusts. That means getting your current and past customers to actually recommend your product or service to others in their network, whether that’s friends and neighbors or business colleagues. Often, that requires an incentive of some sort.

The right incentive for your existing customer making the referral will vary greatly based on your line of business. For a brand built around long-term engagements and repeated transactions—think carpet cleaning, landscaping, heating & cooling—offering free upgrades or a discount on regular service may be all it takes. And it’s a small price to pay to acquire a new customer, the lifetime value of whom will greatly exceed the cost of your gratitude.

On the other hand, if it’s a major or one-time transaction—if you provide residential roofing services, for example—it’s unlikely that a homeowner will be motivated by a discount on future work since it’s a purchase that most people make only a couple of times in their lives.

In the latter case, consider a meal at a popular restaurant (better yet: a choice of restaurants) or a gift card for online or retail shopping. Just make the thank-you gift something with mass appeal and appropriate to your audience.

Remind Your Customers and Prospects

Your referral program is only as good as your promotion of it. Make sure that every single one of your customers knows how it works and how to take advantage of it. Add a form on your website so customers can make referrals at their own convenience—even multiple times. Or leave them with a referral card that a new customer can use to redeem a one-time offer and help you track where referrals are coming from. Promote it on your home pages and link to your referral page from customer surveys, email blasts and thank-you messages and texts.

New customers are life-giving for your business. Attracting prospects already predisposed to trust your brand and value your offerings can shorten your sales cycle and improve the return on your marketing investment.